Head to Head Analysis: DCP Midstream (DCP) and EnLink Midstream (ENLC)

DCP Midstream (NYSE:DCP) and EnLink Midstream (NYSE:ENLC) are both mid-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Profitability

This table compares DCP Midstream and EnLink Midstream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DCP Midstream 2.76% 4.18% 2.02%
EnLink Midstream 3.39% 0.88% 0.45%

Valuation and Earnings

This table compares DCP Midstream and EnLink Midstream’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DCP Midstream $8.46 billion 0.66 $229.00 million $0.53 73.11
EnLink Midstream $5.74 billion 0.38 $212.80 million ($0.05) -242.00

DCP Midstream has higher revenue and earnings than EnLink Midstream. EnLink Midstream is trading at a lower price-to-earnings ratio than DCP Midstream, indicating that it is currently the more affordable of the two stocks.

Dividends

DCP Midstream pays an annual dividend of $3.12 per share and has a dividend yield of 8.1%. EnLink Midstream pays an annual dividend of $1.08 per share and has a dividend yield of 8.9%. DCP Midstream pays out 588.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream pays out -2,160.0% of its earnings in the form of a dividend. EnLink Midstream is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

55.2% of DCP Midstream shares are owned by institutional investors. Comparatively, 32.1% of EnLink Midstream shares are owned by institutional investors. 0.0% of DCP Midstream shares are owned by company insiders. Comparatively, 1.2% of EnLink Midstream shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

DCP Midstream has a beta of 2.27, indicating that its share price is 127% more volatile than the S&P 500. Comparatively, EnLink Midstream has a beta of 2.33, indicating that its share price is 133% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for DCP Midstream and EnLink Midstream, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DCP Midstream 2 3 6 0 2.36
EnLink Midstream 1 10 4 0 2.20

DCP Midstream currently has a consensus target price of $45.40, indicating a potential upside of 17.16%. EnLink Midstream has a consensus target price of $17.54, indicating a potential upside of 44.95%. Given EnLink Midstream’s higher possible upside, analysts clearly believe EnLink Midstream is more favorable than DCP Midstream.

Summary

DCP Midstream beats EnLink Midstream on 10 of the 16 factors compared between the two stocks.

DCP Midstream Company Profile

DCP Midstream, LP, together with its subsidiaries, owns, operates, acquires, and develops a portfolio of midstream energy assets in the United States. The company operates in two segments, Gathering and Processing, and Logistics and Marketing. The Gathering and Processing segment is involved in gathering, compressing, treating, and processing natural gas; producing and fractionating natural gas liquids (NGLs); and recovering condensate. The Logistics and Marketing segment engages in transporting, trading, marketing, and storing natural gas and NGLs; fractionating NGLs; and wholesale propane logistics. As of February 13, 2018, it owned and operated approximately 60 plants and 63,000 miles of natural gas and NGLs pipelines with operations in 17 states. The company serves petrochemical and refining companies, and retail propane distributors. DCP Midstream GP, LP serves as the general partner of the company. The company was formerly known as DCP Midstream Partners, LP and changed its name to DCP Midstream, LP in January 2017. DCP Midstream, LP was founded in 2005 and is headquartered in Denver, Colorado.

EnLink Midstream Company Profile

EnLink Midstream, LLC focuses on providing midstream energy services in the United States. It operates through five segments: Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The company is involved in gathering, compressing, treating, processing, transporting, storing, and selling natural gas; fractionating, transporting, storing, exporting, and selling natural gas liquids; and gathering, transporting, stabilizing, storing, and trans-loading crude oil, and condensate. Its midstream energy asset network includes approximately 11,000 miles of pipelines; 20 natural gas processing plants; 7 fractionators; barge and rail terminals; product storage facilities; brine disposal wells; and a crude oil trucking fleet. The company was founded in 2013 and is headquartered in Dallas, Texas. EnLink Midstream, LLC operates as a former subsidiary of Devon Energy Corporation.

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